The taxman is rapidly catching up with foreign companies operating in India through agents. After Star, Morgan Stanley and Sony, it was the turn of UK-based Rolls Royce to be asked to pay taxes on a part of profits earned from Indian operations.
With an eye on channelising domestic savings into the power sector, the finance ministry is considering granting income-tax exemptions for individual investments up to Rs 50,000 in power infrastructure bonds.
A decision in this regard will be taken by the empowered committee of state finance ministers in its meeting on December 20.
In a move that will significantly reduce paperwork for producers of goods and services, the draft recommendations submitted by the all-states joint working group on goods and services tax (GST) have said one document will have to be filed.
A relatively slow performance by the industrial sector and a high base effect may slow down gross domestic product (GDP) growth in the second quarter (July-September) of fiscal 2007-08 to below 9 per cent, feel analysts.
The suggestion is to introduce a "capital transaction tax" based on the "circle rate" of the state in which the deal is registered.
Rising compliance, buoyant collections may prompt this move
Debt conversion formula will increase govt stake.
In order to provide greater leeway to central government departments and ministries to finalise centrally-funded projects, the Department of Expenditure under the finance ministry has increased the financial limits of projects requiring approval from various cost-approving bodies.
The government may infuse about Rs 10,000 crore (Rs 100 billion) as equity capital in nationalised banks in addition to an identical amount in the country's largest lender, State Bank of India (SBI). Nationalised banks with the government holding closer to the floor of 51 per cent are likely to receive the capital infusion support.
Faced with huge cost overruns due to a delay in building the rural roads under Bharat Nirman, the Planning Commission is now looking at alternative ways to fund the ambitious rural development project of the United Progressive Alliance (UPA) government.The rural road project, christened the Pradhan Mantri Gram Sadak Yojana (PMGSY), has seen tardy performance on the target of constructing 146,185 km of rural roads by 2009.
The Ministry of Statistics and Programme Implementation (MOSPI) is in talks with the Department of Posts to take the help of its staff in collecting sample data for the proposed Consumer Price Index for Rural India (CPI-R). The data for the index would be collected from 1,000 villages, Chief Statistician of India Pronab Sen said on the sidelines of a national seminar on the results of the 61st round of the National Sample Survey.
The finance ministry has opposed the proposed airport at Greater Noida, and has instead favoured upgrading infrastructure at Delhi airport, which it says makes more economic sense. This has come as a shot in the arm for the GMR group, the private sector developer of Delhi airport, which has been opposing another airport so close to the existing one.
The Sixth Pay Commission is likely to significantly raise basic salaries for an estimated 4.5 million central government employees. The recommendations are expected to be submitted in January, a few months ahead of schedule, and the award is likely to come into effect from January 2006.
Tax compliance in India is improving steadily. Four years ago, 76 per cent of the 28.8 million tax-payers (assessees) filed annual income tax returns. Since then, the number of tax-payers has been increasing and so is the compliance level. In 2004-05, the compliance rose to 78.2 per cent on a tax-payer base of 29.21 million. In 2005-06, this rose to 82.1 per cent on a base of 29.63 million. In 2006-07, this has risen to a new high of 85.3 per cent on a base of 29.79 mn.
Officers of the elite Indian Administrative Service (IAS) want their pay scales to be determined on the basis of prevailing market rates. However, they are not ready to give up the substantial perks they enjoy, like palatial bungalows in city centres, number of attendants, guards, drivers and other assorted facilities.
The sixth central Pay Commission is examining the feasibility of introducing performance-linked salaries for government employees. The commission has constituted a study group headed by Indian Institute of Management, Ahmedabad Professor Biju Varkkey to develop a model on these lines.The study group has submitted interim reports and is expected to send its final report soon.
The high level of capital inflows has forced the government to put fresh restrictions on ECBs. In August this year, the Reserve Bank of India tightened ECB rules by limiting the use of foreign loans in India at $20 million per company.
The two groups have another JV, Wadia BSN, set up in 1996 to launch Groupe Danone's products from its global portfolio. However, nothing has been launched through the JV till date and Danone is in negotiations with the Wadias to dissolve the JV.
ICICI Lombard has bagged a contract from the railways to provide personal accident cover at a premium of just 4.75 paise per passenger. The personal accident cover is for a year starting from September 20, 2007.
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